Buccaneer Energy Limited issued an update in respect to production at the Pompano Project in which the company has a 65% working interest and which is located in Texas State waters in the Gulf of Mexico.
Pompano well ASL-103229 #1 commenced production on March 9, 2008, with well SL-103230 #1 beginning production on May 1, 2008. The production has since performed with high levels of utilization.
In April 208, Buccaneer's 65% working interest in the project yielded 105,555 MCF in gas production volume, 115 barrels of condensate production and a net revenue of $613,775. Those numbers spiked in May, when the project yielded 309,934 MCF in gas production volume, 1,036 barrels in condensate production and a net revenue of $2.3 million. In June, the project yielded 270,181 MCF in gas production volume, 1,067 barrels in condensate production and an estimated net revenue of $2.2 million.
Well utilization rates for the period of April-June 2008 have been between 95% and 98%. The performance of the production infrastructure has been excellent and exceeded the company's initial expectations in overall percentage utilization.
The base gas sales contract price for July 2008 has been set at $12.84 per thousand cubic feet of gas (MCF) and therefore the company is anticipating net revenue of between $2.2 and $2.4 million for July 2008, based on current anticipated production rates.
Third Pompano Well
AnaTexas Offshore, Inc. (the operator) and Buccaneer are currently preparing to drill the third well in the Pompano redevelopment program. This well will be designated SL-103230 #4 and will again be drilled into a Proved Undeveloped Reserve (PUD).
Hercules Offshore has advised AnaTexas that the current timetable is for the rig to move into position in mid-August 2008, with a delay due to longer time on the rig's current job.
An additional three drilling locations have been identified at the existing Pompano Porject.
A review of 3D seismic over the recently acquired Redfish prospect has been completed and it is expected that the number of drilling locations will increase. The Redfish prospect consists of 720 acres and was acquired at a Texas State lease sale in April 2008.
The Redfish prospect adjoins the Pompano project and the seismic review indicates it contains many of the same sand packages that have been previously produced from Pompano.
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